Dow, S&P 500 rise after Fed minutes reassure on rates

NEW YORK: US stocks ended mostly higher on Wednesday, with the S&P 500 just missing a record close, after minutes from the Federal Reserve's July meeting gave investors reason to believe that the central bank is in no rush to raise interest rates.

The minutes were from the two-day meeting of the Federal Open Market Committee in late July, when the Fed trimmed its monthly bond-buying programme by an additional US$10 billion.

Stocks pared gains immediately after the release of the minutes, but the Dow and the S&P 500 returned to positive territory with a little more than an hour of trading left in the regular session.

The S&P 500 barely missed its record close of 1,987.98 and finished within 5 points of its all-time intraday high of 1,991.39, both set on July 24.

"The market was absolutely being driven by the Fed. It started out strongly, then it looked like a bit of capitulation before the statement came out, and then we obviously saw a big sigh of relief," said Drew Wilson, an equity analyst at Fenimore Asset Management in Cobleskill, New York.

With the minutes out, investors have turned their attention to the annual meeting of top central bankers in Jackson Hole, Wyoming, which will take place from Thursday through Saturday. Fed Chair Janet Yellen is expected to acknowledge during the conference that while economic data has generally been supportive, she remains concerned about slack in the labour market. She is scheduled to speak on Friday.

The Dow Jones industrial average rose 59.54 points, or 0.35 per cent, to end at 16,979.13. The S&P 500 gained 4.91 points, or 0.25 per cent, to finish at 1,986.51. The Nasdaq Composite dipped 1.03 points, or 0.02 per cent, to close at 4,526.48.

During the regular session, Home Depot was the Dow's biggest percentage gainer. Shares of the world's largest home improvement retailer rose 2.9 per cent to a record closing high of US$90.75 a day after Home Depot's earnings beat Wall Street's expectations. The stock also set an all-time intraday high on Wednesday of US$91.07.

Lowe's Cos Inc, a rival of Home Depot, rebounded. The stock gained 1.6 per cent to close at US$52.33 after setting an intraday record high of US$52.65. At one point, Lowe's stock fell as low as US$49.71 after the home improvement products retailer reported better-than-expected quarterly results but cut its full-year forecast.

The S&P retail index ended up 1.1 per cent, marking its fifth gain in six sessions despite tepid results from some major retailers.

Shares of Target Corp rose 1.8 per cent to US$60.33, shaking off initial declines after the US discount retailer's second-quarter earnings fell shy of analysts' estimates. The company cut its full-year outlook.

American Eagle Outfitters was a bright spot in the retail sector after the teen-oriented chain's second-quarter results beat expectations and forecasts for third-quarter earnings were in line with the current estimate. Its stock jumped 12 per cent to US$12.98.

About 4.5 billion shares traded on all US platforms, according to BATS exchange data, compared with the five-day average of 5.2 billion.-- Reuters